Australian shares finished stronger for the third consecutive day amid renewed optimism about Europe’s ability to avert a financial disaster in Spain.
At the close on Thursday, the benchmark S&P/ASX200 index was up 53.3 points, or 1.31 per cent, at 4,108.6.
The broader All Ordinaries index was up 52.0 points, or 1.27 per cent, at 4,156.7.
That represents a gain of about $16.8 billion on the day.
On the ASX 24, the June share price index futures contract was 53 points higher at 4,115 with 31,914 contracts traded.
The string of positive trading days contrasts with a horror Monday when Australian shares lost $26 billion on worrying data about the world economic outlook.
The Australian market took its lead on Thursday from offshore after US stocks overnight jumped 2.3 per cent. This was prompted by the European Central Bank saying it would keep open its unlimited liquidity loans for euro zone banks, at least through 2012.
European stocks moved sharply higher, extending gains after recent heavy losses, on hopes EU leaders can keep Spain’s stricken banking system afloat.
CMC Markets chief strategist Michael McCarthy said rumours about a bailout of Spain’s banking sector and a Chinese rate cut had the markets running hot.
“The biggest rallies we’re seeing here and around the globe are in banks, which suggests to me all this market talk about direct recapitalisation of Spanish banks is the actual driver of this two-day rally,” he told AAP.
“Financials, ex-property trusts, is the best performing sector on the market today.
” … it’s certainly not time to get overly optimistic but there is less fear in the market today then late last week.”
Australian employment surged by 38,900 in May to beat all expectations, it was revealed on Thursday by official data.
Australia’s big four retail banks all posted gains, with ANZ the strongest, up 47 cents, or 2.2 per cent at $21.81, CBA advanced 99 cents to $51.04, NAB was 31 cents higher at $22.56 and Westpac was up 42 cents at $20.77.
The big miners also gained, with BHP Billiton lifting 48 cents at $31.58, Rio Tinto climbing $1.17 to $55.42 and Fortescue Metals Group improving 13 cents to $4.68.
The bourse’s biggest goldminer Newcrest Mining was seven cents stronger at $25.78.
Qantas fell to a new record low, closing 6.5 cents or nearly six per cent worse at $1.06.
Mr McCarthy said the ongoing selling in Qantas was related to this week’s 91 per cent downgrade in its profit outlook.
Trading volumes in Qantas of about 53 million shares were more than six times above its average.
National turnover was 1.71 billion shares worth $4.46 billion, with 610 stocks up, 387 down and 365 unchanged.
